Although the groups are small, they are typical of neo-Nazi messageboards: posting links to Aryan supremacy websites, adding pictures of concentration camps and featuring members who use swastikas as their logo instead of photos of themselves.

One group, which calls the Holocaust "a series of lies", has messages suggesting the German people were manipulated by Jewish interests, while elsewhere one member says that Jews are "snakes and liars". It's intentionally offensive stuff, and illegal in many European countries.

Over the weekend, Facebook responded to the criticism in a manner which has appeared to exacerbate things, rather than quieten them down.

Specifically, we are sensitive to groups that threaten violence towards people and these groups are taken down. We also remove groups that express hatred towards individuals and groups that are sponsored by recognized terrorist organizations. We do not, however, take down groups that speak out against countries, political entities, or ideas.

The bottom line is that, of course, we abhor Nazi ideals and find Holocaust denial repulsive and ignorant. However, we believe people have a right to discuss these ideas and we want Facebook to be a place where ideas, even controversial ideas, can be discussed. Of course, we have some limits.

This angered Cuban ("Has Facebook now taken a moral subjective stance on behalf of all users on how such groups should be dealt with?") and caused a small storm of protest from users who believe Facebook is acting hypocritically.

They argue that while the site is happy to ban pictures of breastfeeding mothers because of nudity, it isn't prepared to stand firm on closing groups that would be illegal in many countries.

The issues of Nazi hate speech has come up many times before online. Yahoo had a long-running dispute with the French government over its auction site, which allowed the sale of Nazi memorabilia (illegal under French law) while eBay has decided to ban the sale of Nazi memorabilia full stop - even in America, where the trade is not banned.

Dealing with this subject is always tricky ground - and it is a little surprising that Facebook has managed to grow so large without this problem rearing its head before.

But perhaps the argument is really about where Facebook puts it priorities. Given that the company runs a 150-strong team of so-called "porn cops" to patrol for risque images - profiled at length recently in Newsweek - why does it feel that hate speech isn't worth the same amount of trouble?

In many ways, the controversy is a direct product of America's conflicted relationship with morals. The country is largely puritanical when it comes to sex, yet cherishes the right to free speech even when (in some cases) that becomes the right to offend. That's at the heart of Facebook's dilemma: it grew up in a culture where it's wrong to see a nipple, but somebody suggesting the death of millions of people - and calling them snakes and liars - is merely a conspiracy story is acceptable within the limits of free speech.

In Europe, the see-saw is more evenly balanced - nudity isn't necessarily offensive, but racial supremacists are roundly condemned. How do you balance those two? How do you respect the laws of a country without impeding upon the rights of users in other nations? How does Facebook decide where to draw the line between offensiveness and hatred?

This is a clash between corporate interests and cultures: and I don't think we've heard the last of it.